Published in Food/Agribusiness
Bell’s Brewery Inc. founder Larry Bell. Bell’s Brewery Inc. founder Larry Bell. COURTESY PHOTO

M&A Awards: Sale to Lion ensures legacy of Bell’s Brewery continues

BY Sunday, February 27, 2022 06:42pm

Throughout his more than 35-year career at the helm of Bell’s Brewery Inc., Larry Bell was known for being one of the most outspoken proponents for independently owned craft breweries in the United States. 

In public and private, he called out brewery owners who sold all or parts of their companies to large international brewing conglomerates, excoriating them for joining forces with Big Beer, whose products and practices were anathema to the craft beer movement Bell and others helped to pioneer. 

In what’s now become a piece of industry lore, Bell created tension a few years ago at a Michigan Brewers Guild meeting when he is said to have urged the group’s board to remove Founders Brewing from its membership because the Grand Rapids-based competitor at that time had sold a 30-percent stake in the business to Spain-based Mahou San Miguel Group. While the board didn’t act on the proposal, Bell let everyone know where he stood on the issue.

Retail sector

Bell’s Brewery

Top executives: Carrie Yunker (executive vice president), John Mallett (vice president of operations)

Annual sales: Did not disclose; brewing capacity of 500,000 barrels

Total Michigan employees: 550

Company description: Craft beer maker with a brewery and pub in Kalamazoo, production facility in Comstock, and Escanaba satellite brewery and pub known as Upper Hand Brewery

Advisers: Arlington Capital Partners (investment bank), Rhoades McKee P.C. (legal adviser for Bell’s Brewery Inc.), Miller, Johnson, Snell & Cummiskey PLC (legal adviser for Larry Bell), Honigman LLP (legal adviser for Laura Bell), Howell Parfet and Schau PLC (other legal), Miller, Canfield, Paddock and Stone PLC (legal for Lion, per state filings)

As a company, Bell’s Brewery even wore its 100-percent family ownership and independence on its sleeve, as it were, with the message emblazoned prominently on the brewery’s packaging and labels. 

So, when the news broke in November 2021 that Bell was being acquired by Australia-based Lion Little World Beverages Inc., a division of Japan’s Kirin Holdings Co. Ltd., it understandably left some ardent craft beer fans scratching their heads and labeling the company as a “sell out.”

It was something Bell had to have known would be coming once he and the brewery’s board of directors made the decision in January 2021 to engage investment bank Arlington Capital Partners to shop the company to potential suitors.

At the time, Bell said some of his life experiences, including a bout with kidney cancer, had helped bring clarity to the need for the company to find a buyer to continue on its legacy and the employment of the more than 550 people he had working for him. 

“At 63, I’m starting to get up there and I think that (having cancer) brought into focus that we didn’t really have a succession plan and that we needed to take a look at what was going to happen to the company for the good of the employees and the company,” Bell told MiBiz. “What could we do?”

Arlington Capital ran a process for Bell’s Brewery, which led to a number of non-disclosure agreements signed with interested parties. Bell declined to say how many potential buyers the company vetted before landing on Lion, the parent company of Fort Collins, Colo.-based New Belgium Brewing Co. 

As MiBiz previously reported, the sale closed on Dec. 31 and included the Escanaba-based Upper Hand Brewery satellite location. The deal marked a complete exit for Bell and his daughter, Laura Bell, who had stepped down as CEO of the company a little more than two years prior.

While Bell declined to discuss specifics of the deal, he said the sale process proved eye-opening as a business owner and entrepreneur who had started the brewery in 1985 with an idea and a 15-gallon soup kettle. In one example, he cited the virtual data room for the deal negotiations, which contained more than 100,000 pages of documents at the time the sale was finalized.

“Things are different today, but when I started, the barriers to entry were pretty darn high to get into the business,” Bell said. “I learned that barriers to exit can also be very high. Just the amount of data that was needed to consummate the deal was mind blowing. I guess you just don’t realize how much is out there on your company that somebody needs to know about. For me, it just happened slowly over all the years.

“It was pretty complex, with the financials and just all the things that go with the financials, the I.P., the distributor contracts, employment engagements, schedules of assets, all the environmental stuff that goes with property. There’s a lot to dive into.”

While the company didn’t have a formal succession plan in place, Bell had completed much of the heavy lifting over the last decade to position the company for the future. That included buying out all of the company’s minority shareholders in what was a highly contentious process that resulted in a round of lawsuits and even led Bell to threaten to sell the company at one point if the shareholders didn’t take his deal. 

At the time of the sale to Lion, Bell and his daughter were the only two shareholders, “which obviously makes things a lot easier,” he said. 

As well, Bell’s Brewery was “on the path” to firming up various processes and practices to ensure stability for the company, and had elevated longtime employee Carrie Yunker to serve as executive vice president and control much of the day-to-day business, a role she continues in after the sale.

“When you’re busy just making beer, maybe you don’t have things as buttoned up as it needs to be for the sale, but you’re at least on the path to doing them and then you have to just get it all done,” Bell said.

Bell acknowledged the sale also led to some comical moments for him personally. The classic car enthusiast had to turn in his company car in December at the close of the sale and didn’t really have a vehicle suitable for winter in his stable of collectibles. He also had to figure out how to transfer his cell phone over to his wife’s plan, sign up for a new email address and get a personal credit card.

“I’ve always had company credit cards. You find out that American Express says they don’t know who you are. Like, what?” he said, laughing. “You’re just an individual, you’re not a corporation. You’ve got a limit now.”

Since the sale, Bell has spent some time traveling with his wife, including one trip to the Caribbean during which he met Rolling Stones guitarist Keith Richards. Bell also has remained active in Kalamazoo, where he’s set up a foundation and is developing some plans for the future. So far in 2022, he’s also been active philanthropically, donating $1 million to Boys and Girls Clubs of Greater Kalamazoo; $5.25 million to Kalamazoo College, his alma mater; and $8 million to The Irving S. Gilmore International Piano Festival to establish the annual Larry J. Bell Jazz Artist Award for jazz pianists.

One thing the modern-day beer baron is not doing may be surprising: Bell said that as of Jan. 2, he’s been on a sabbatical from beer “to let my taste buds recover,” with his next sip not anticipated until the end of July. (For the curious, it will be a Big Porch Ale in its natural element at the Grand Hotel on Mackinac Island.)

As well, Bell said that while people still reach out to him about their experiences with Bell’s beers, he’s not thinking at all about his name continuing to be used in his absence on the products or the company. 

“I came to grips with that the day that we decided that we were going to sell,” he said. “You have to understand that I’ve been well taken care of to not have to worry about that.”

Some might say that’s a fitting way for Bell to cap a wildly successful career in which he helped to establish the craft brewing industry in Michigan and nationally, created iconic brands like Two Hearted Ale and Oberon, and grew the company from humble origins into the 16th largest brewery in the country with a production capacity of about 500,000 barrels. 

“My original voiced goals were to get the brewery to 30,000 barrels and to make $100,000 a year as a salary. I definitely exceeded my goals, but nobody that started back then had any idea of what was going to happen to us. It was a small business,” Bell said reflecting on his career. “You strap yourself into the roller coaster and away it goes, and, well, we all went for a pretty wild ride.

“I’m really proud of what I was able to accomplish and with a lot of great people. I’m just so proud of all the employees that I’ve had and folks whose careers I’ve helped move down the way. I’m proud of the culture that we were able to do of helping develop Kalamazoo into a better city. So at the end of the day, that’s a good feeling.”

Read 3465 times Last modified on Wednesday, 02 March 2022 10:54